This Roybal Center for Health Policy Simulation will develop better models to understand the consequences of biomedical developments and social forces for health, health spending, and health care delivery. It will build on a large body of research at RAND, including a multi-year effort to identify and forecast the consequences of medical breakthroughs over the next 30 years. This project used panels of experts from around the country to identify key breakthroughs over the next 10 years would most affect future health and spending of the elderly. We then developed a micro-simulation model to simulate the key outcomes. The ultimate goal of the Center is to translate this existing work--as well as other, aging-related research at RAND--into policy tools that result in better health investments. The specific aims are: (1) Create a Center that researches new methods for forecasting disease, functional status, and health expenditures of older populations, and develops decision-making tools based on these methods; (2) Assess how new and existing medical interventions affect the health, functional status, and spending of older cohorts, and their implications for Medicare and Medicaid and society-at large; and (3) Assess how demographic and public health trends--such as trends in obesity, diabetes, and smoking--affect future outcomes and their implications for Medicare, Medicaid, and society-at large. The proposed Center will meet these goals by supporting a Management Core and Pilot Core to predict the consequences of new technologies and treatments for health care spending (both public and private), health status, and longevity. Each pilot project will meet one of four objectives: (1) Research the basic determinants of costs and health status among the elderly and near elderly; (2) Develop simulation models to predict costs, health, functional status, and longevity; (3) Apply these models to assess the value of interventions or treatments; and (4) Disseminate the tools to decision makers in industry and the government.